How AI is enhancing anti-money laundering strategies for improved financial security
Financial institutions collect massive volumes of transactional data daily,
making it impractical for human experts to review each transaction for signs of
money laundering manually. AI systems, on the other hand, can efficiently
process this data, flagging transactions that exhibit unusual patterns or
deviate from established norms. These AI systems utilise advanced algorithms to
develop customer behavior profiles, creating a baseline against which future
transactions can be compared. Any deviation from the norm, such as sudden large
transfers, frequent cash deposits, or transactions with high-risk jurisdictions,
triggers an alert for further investigation. This allows institutions to focus
their resources on genuinely suspicious activities rather than drowning in false
positives. Analysing data to recognise suspicious activities: AI algorithms
excel at analysing enormous datasets, identifying hidden patterns and
correlations that could signify money laundering activities. By examining
transaction history and customer behavior, AI-enabled tools can uncover links
between seemingly unrelated events.
Record Numbers of Ransomware Victims Named on Leak Sites
At current levels, 2023 is on course to be the biggest year on record for
victim naming on so-called ‘name and shame’ sites since this practice began in
2019. It is expected the 10,000th victim name was posted to leak sites in late
summer 2023, but this has not yet been confirmed by Secureworks. ... The 2023
report found that ransomware median dwell time was under 24 hours,
representing a dramatic fall from 4.5 days during the previous 12 months. In
10% of cases, ransomware was deployed within five hours of initial access.
Smith believes this trend is due to improved cyber detection capabilities,
with cyber-criminals speeding up their operations to reduce the chances of
being stopped before deploying ransomware. “As a result, threat actors are
focusing on simpler and quicker to implement operations, rather than big,
multi-site enterprise-wide encryption events that are significantly more
complex. But the risk from those attacks is still high,” commented Smith.
Cloud backup and disaster recovery evolve toward maturity
At the end of the day, backup as a service is kind of just that. It operates
like a regular backup application, using a schedule and point-in-time
backups. DRaaS is more about failing over if something comes up as a
disaster recovery process. It's designed to replicate or restore data
environments automatically; it doesn't transform data in the same sense that
a backup may have a particular data format. DRaaS is about moving the data
from point A to point B and being able to get back to it as quickly as
possible, especially in the context of a failover. ... But with the
flexibility that cloud data protection affords, a lot of these solutions can
essentially get updated whenever you log on because they're SaaS-based.
Also, there's so much data in the cloud now and lots of investment in
digital transformation, new platforms and cloud-native applications, which
is triggering some rethinking of cloud data protection strategies. All of
this I think is shortening the review cycles. It's actually a domino effect:
Data protection follows data production.
Mitigating Security Fatigue: Safeguarding Your Remote Team Against Cyberthreats
It’s easy for remote workers to feel disconnected from their teams and
employers, which is why it’s important to keep communication consistent.
Having the right collaboration tools can make all the difference in keeping
remote workers engaged and more likely to follow security protocols. Video
calls can help team members meet face-to-face, reducing miscommunication and
misunderstandings. It’s also important to have an easy way to collaborate on
projects so everyone can stay on the same page and work moves forward
efficiently. Of course, any technology you use should be easy to use and
easy to keep secure. With the right communication tools, your remote team
members can collaborate effectively, stay connected with team members, and
generally remember that they aren’t at home alone — they belong to a larger
organization. This feeling of connection will encourage and remind them to
implement the company’s security standards even though they work from home.
As remote work becomes more popular, the need for strong security practices
becomes even more vital.
One might be inclined to believe (from the Trellix example) that the returns
and competitive business risks of adopting and not adopting AI in
cyber-security processes are quite high from a sales perspective. This point
can be rationalised by seminal academic theory in the strategic management
sciences. Based on insights from the widely popular Five Forces strategy
model by Michael Porter of the Harvard Business School, the threat of new
entrants (Trellix competitors), product substitutes (competitor products
churned from AI-driven platforms like HVS), high bargaining power of
customers (clients of Trellix-like products), and low bargaining power of
suppliers (Trellix) should push enterprises to necessarily adopt AI as a
cyber-security strategy to boost sales. ... On top of everything, AI as a
business strategy for the modern IT/OT-driven business ecosystems has the
potential to adhere very well with certain elements of the seminal
Eight-Fold strategy proposed by Michael Cusumano of the MIT Sloan School of
Management for software-driven businesses
How to Stay Ahead of the Regulatory Curve with Robust Data Governance?
Establishing a data governance culture requires the right combination of
people, process, and technology. Defining the right roles and
responsibilities (people) and developing the right data governance framework
(process) are steps in the right direction. But without the right tools
(technology), it becomes difficult at best for a data governance culture to
succeed. A data catalog is a critical tool for organizations looking to
establish a data governance culture. It gives business users, many of whom
are not data experts, clarity on data definitions, synonyms, and essential
business attributes so they can understand and use their data more
effectively. Data catalogs show who owns the data, allowing for greater
collaboration across the business. They provide a self-service way for
everyone in the organization to find the data they need and turn what used
to be tribal knowledge into useful and accessible information that they can
use to make better business decisions.
Preparing for the Unexpected: A Proactive Approach to Operational Resilience
No firm can achieve operational resilience purely on its own. Intelligence
sharing within the global financial community helps firms understand current
and emerging threats and learn how others are mitigating them. It keeps
larger institutions at the forefront of cybersecurity while arming smaller
firms with knowledge and tools to protect themselves. It is so critical to
operational resilience that DORA dedicates an entire article to it. Beyond
regulation, the public sector is also increasingly collaborating with the
private sector to protect critical infrastructure, which includes the
financial sector. Around the world, organizations including the US Treasury
Department's Hamilton Series and NATO's Locked Shields regularly conduct
large-scale exercises to test that communication and coordination channels
will function efficiently during major incidents. The goal is not only to
minimize operational disruption but to proactively maintain public calm and
trust. Operational risks are no longer geographically bound. Cross-border
intelligence sharing and exercises help financial institutions build a
comprehensive approach to operational resilience.
The Top 10 Hurdles to Blockchain Adoption
One of the most significant factors that has made blockchain adoption more
difficult is the overall age of the average person using banking services.
Unlike previous generations, the current demographic in the world is older
than ever. Advancements in healthcare and other factors have increased life
expectancy in most regions of the world. ... Energy consumption issues
remain a top problem in the market. Conservationists have repeatedly pointed
out that networks that leverage the Proof-of-Work consensus algorithm are
power-hungry. The reason for this consumption is that the PoW system
requires users to exercise their computational power as part of the
validation structure. To combat these issues, there has been a steady
migration of mining farms to renewables. ... Another issue that has held
back blockchain adoption is the lack of supportive legislation for these
projects. When there is a lack of governmental support, financial
institutions are wary of joining an industry. The main reason for the
concern is that they fear later regulatory pushback.
Redefining the Framework of Innovation
The impact of ecosystems on digital disruption today does draw sharp
parallels to another important technological evolution. Specifically, it
brings to mind the evolution of manufacturing and distribution technology
which enabled the transition from vertical integration to multi-tier supply
networks. The twist is ecosystem models look forward, not back in the value
chain, enabling entire new value chains. However, while there are many clear
benefits of ecosystems, these business models are contractually,
logistically, and commercially complex. This is especially true when you
factor in the challenges of partnering with early-stage tech companies. So,
where should leaders begin when considering a partnership or alliance? Take
inventory of your most critical innovation paths and evaluate them against
the ecosystem model. Key criteria may include needs for outside expertise
and intellectual capital, a reduction in capital risk and accelerated
innovation delivery to the market. Focus time and resources on selecting the
right ecosystem partner.
Identifying The Right Risk Appetite For Your Business
While risk appetite has a traditional outlook, risk tolerance (or impact
tolerance) helps companies move closer to the path of resilience. If risk
appetite tells us how much risk an organization can take, risk tolerance
indicates how much risk an organization "wants" to take in numbers.
Essentially, tolerances are defined losses that an organization is willing
to incur in meeting an objective. Every decision bears risks. If a business
accepts risk or incurs loss due to a risk event that exceeds the agreed-upon
risk appetite and tolerance levels, then serious fiscal, legal and
reputational consequences can occur. For this reason, risk appetite should
be reevaluated and reconciled whenever changes occur to strategic
initiatives or the business environment. ... Risk appetite as a concept is
not new, but what is trending is linking them to resilience programs so that
organizations take the right amount of risk to meet business objectives
while ensuring sustainability, employee health and safety and stakeholder
well-being.
Quote for the day:
"The secret of success in life is
for a man to be ready for his opportunity when it comes." --
Benjamin Disraeli
No comments:
Post a Comment